Egyptian pound steady at forex sale, strengthened on black market

Egypt's central bank kept the pound steady against the dollar at its official foreign currency auction on Sunday but the currency strengthened against the dollar on the black market.
Egypt, which depends on imported food and energy, is facing a dollar shortage and increasing pressure to devalue the pound.
The central bank surprised markets when it strengthened the pound against the dollar on November 11 by 20 piasters and has bucked expectations by holding it steady ever since.
The central bank sold US$39.4 million at a cut-off price of LE7.7301 to the dollar on Sunday, unchanged from the previous auction.
The official rate is still far stronger than the black market rate, which strengthened to LE8.60 to the dollar on Sunday from LE8.63 on Thursday.
The country has been starved of foreign currency since a popular uprising in 2011 ousted autocrat Hosni Mubarak and drove tourists and foreign investors away.
Egypt's reserves have tumbled from $36 billion in 2011 to $16.4 billion, and the country has been rationing dollars through weekly dollar auctions to banks, keeping the pound artificially strong.
The bank's Monetary Policy Committee raised benchmark rates by 50 basis points last month, citing inflationary pressures.
In February, the central bank imposed capital controls, limiting dollar-denominated deposits to $50,000 a month in an attempt to fight the black market. The move caused problems for importers who could no longer source foreign currency to clear goods, which piled up at ports. 

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